Canadian dollar hits six-day low as pandemic clips risk appetite - Reuters News
Canadian dollar hits six-day low as pandemic clips risk appetite - Reuters News
- Canadian dollar weakens 0.5% against the greenback
- U.S. oil price falls 2.7%
- Canadian bond yields ease across a flatter curve
TORONTO, Oct 26 (Reuters) - The Canadian dollar fell to a six-day low against the greenback on Monday as rising COVID-19 infections and uncertain prospects for U.S. fiscal aid weighed on sentiment, with investors also eyeing a Bank of Canada interest rate decision this week.
Global shares .WORLD started the week on the back foot as surging coronavirus cases in Europe and the United States clouded the global economic outlook, while there was no clear prospect of a U.S. pandemic relief package. (Full Story)
Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to global economic prospects.
U.S. crude CLc1 prices were down 2.7% at $38.79 a barrel, extending last week's decline, while the safe-haven U.S. dollar rose against a basket of major currencies. (Full Story) (Full Story)
The Canadian dollar CAD= was trading 0.5% lower at 1.3185 to the greenback, or 75.84 U.S. cents, giving back almost all of last week's advance. The currency touched its weakest intraday level since last Tuesday at 1.3196.
Speculators have raised their bearish bets on the Canadian dollar to their highest in seven weeks, data from the U.S. Commodity Futures Trading Commission showed on Friday. As of Oct. 20, net short positions had increased to 19,075 contracts from 13,564 the previous week.
The Bank of Canada is due to make an interest rate decision and update its economic outlook on Wednesday. The central bank has said it will leave rates at a record low of 0.25% until its 2% inflation target is achieved sustainably, which it does not expect for at least two years.
Canadian government bond yields were lower across a flatter curve in sympathy with U.S. Treasuries. The 10-year yield CA10YT=RR fell 1.8 basis points to 0.625%, extending its pullback from Friday's eight-week high of 0.680%.
U.S. new home sales unexpectedly fall in September - Reuters News
WASHINGTON, Oct 26 (Reuters) - Sales of new U.S. single-family homes unexpectedly fell in September, but the housing market remains supported by record low interest rates.
The Commerce Department said on Monday new home sales fell 3.5% to a seasonally adjusted annual rate of 959,000 units last month. August's sales pace was revised down to 994,000 units from the previously reported 1.011 million units.
Economists polled by Reuters had forecast new home sales, which account for about 14% of housing market sales, rising 2.8% to a rate of 1.025 million units.
Rising infections causing nervousness in German economy - economist - Reuters
BERLIN, Oct 26 (Reuters) - The rising number of COVID-19 infections both in Germany and abroad is casting a pall over sentiment in Europe's largest economy, Ifo economist Klaus Wohlrabe said on Monday.
He said he expected fourth-quarter growth of 2.1%, but said that forecast could be overturned if rising infection rates triggered a second lockdown. Growth in infections in France, Italy and Spain were also hitting exports, he added.
"The real hit would come if schools and kindergartens had to close," he said. "That would have a massive impact on the economy and industry."
He added that the auto industry presented one chink of light amid the economic gloom. "The car makers are doing really well at the moment."
